DWP reveals two new payments to support cost of living in 2026
Millions of households will soon be able to benefit from cash payments, rental support, food vouchers and more under the new program launched by the Department for Work and Pensions (DWP).
From April councils will be able to manage Labour’s new ‘Crisis and Resilience Fund’, designed to support low-income households in times when meeting basic needs becomes a struggle.
This is a scenario many people have faced; Recent research from the Trussell Trust reveals that 14 million adults go without food because they cannot afford it. At the same time, stubbornly high household bills mean many people are struggling to balance their finances.
The government has pledged to give local authorities £1bn a year for at least three years through the new fund. It will replace the Household Support Fund, whose continuation and final financing was previously approved annually.
Responding to the funding, the Local Government Association welcomed the long-term commitment but said: Independent Many municipalities think that they will not be able to meet local needs in October. Almost two-thirds (63 percent) of respondents said it would help at least to a small extent, while only two percent said it would help greatly.
On Tuesday the DWP revealed more information about the plan guiding councils and confirmed what UK households can expect in April.
In addition to the provisions to support local support services, two new payments will be introduced within the fund: the crisis payment and the housing payment. Both of these serve different purposes and will have different suitabilities.
crisis payment
The DWP said the new ‘crisis payment’ – as it will be known across the UK – is designed to offer payments to “individuals in crisis”.
Like the Household Support Fund, councils will continue to have discretion over the exact eligibility criteria. But government guidance says this should not be limited to just people on benefits.
Authorities will use the crisis payment to support low-income households experiencing financial shock or at risk of falling into crisis.
This may include people who are left without basic needs such as food, shelter or heat, or items such as furniture and appliances. Disasters cover the many reasons this can happen, such as health problems, theft, separation from an abusive relationship, or a gap in regular income.
DWP wants councils to adopt a ‘cash first’ approach to crisis payments; This means that cash payment must be made unless there is a reasonable reason to do so. This may be in the form of food vouchers or direct provision of necessary items.
The crisis payment is designed to meet occasional or short-term needs and is not a supplement to regular income, the ministry added.
Some local authorities will also use the funding to provide food vouchers over the summer to parents of children eligible for free school meals.
Lynn Perry, chief executive of Barnardo’s, said: “We welcome the publication of the government’s guidance on the new Crisis and Resilience Fund. “For too many families, a sudden crisis could push them to the brink and leave children at risk of being deprived of food, warmth and other basic needs.
“This guide sets out how crisis support can be delivered in a way that protects dignity, offers real choice and reaches those who need it most. It has the potential to make a meaningful difference for children growing up in poverty.”
housing payment
A new ‘housing payment’, which aims to provide financial support for housing costs for people in need, will also be introduced across the UK. This will replace the optional housing payment for claimants from April.
This will usually be rent related, such as rent in advance, rent deposit or deficiency. It may also include a lump sum related to housing, such as moving costs.
Unlike the crisis payment, the housing payment will be limited to those who benefit from certain benefits. These are either housing benefit or universal credit with a housing component for rental costs. However, the DWP says those who are not eligible but still need it may be considered for a crisis payment instead.
They will also have the opportunity to have a longer term and make more regular payments. For example, a person who is looking for a job and is currently struggling with rent can apply for regular housing payments until they increase their income or find another place to live.
A Government spokesman said: “We are committed to tackling poverty and delivering greater security and opportunity to families across the UK.
“The £1bn multi-annual Crisis and Resilience fund will help prevent households falling into crisis by giving local authorities the certainty they need to provide emergency financial support.”
